News Release: Ferrotec Holdings Corporation(6890 TSE Standard)
July 18, 2024

Notice of the Establishment of a New Silicon Parts Company in Malaysia, the Increase in Capitalin an Existing Subsidiary, the Conversion of an Existing Subsidiary to a Specified Subsidiary
and Capital Investment (Construction of a New Factory)
Ferrotec Holdings Corporation (Representative Director: He Xian Han; hereinafter “the Company”) announces that, at themeeting of the Board of Directors held yesterday, we resolved to establish a silicon parts manufacturing subsidiary calledFerrotec Silicon (Malaysia) Sdn. Bhd. (hereinafter “FTHSM”) in southern Malayasia and to construct a new factory there as well.
Details are as follows.
Together with this, we would like to announce that our Japanese subsidiary Ferrotec Silicon Japan Corporation (hereinafter“FTHSJ”) will convert into a specified subsidiary because we will increase the capital in the company to invest in FTHSM as aresult of this matter.

1. Background and purposesAs one of our semiconductor manufacturing component businesses (semiconductor materials), the Silicon Parts Business hasgrown rapidly in response to the increasing demand for semiconductor manufacturing equipment in recent years. In terms ofproduction, we have production bases in Hangzhou, Yinchuan and Changshan in China. With those bases, we have realizeda stable supply in response to strong customer demand., and built long-term relationships of trust with major global customers.
Nevertheless, our major customers have been shifting their production bases to the outside of China, such as Southeast Asia,
due to changes in the business environment in recent times. In light of this, we have now decided to construct a new factory insouthern Malaysia. We will aim to capture more customer demand for further growth through production in this area.
We will establish the new factory by leasing the factory site of Ferrotec Power Semiconductor Malaysia Sdn. Bhd. (hereinafter“FLHM”) as we announced in “Notice of Capital Investment (Construction of a New Factory) in Malaysia by Subsidiary that
Manufactures Insulated Heat Dissipating Substrates for Power Semiconductors” dated July 19, 2023. We will aim to speed up
the launch of the factory and reduce investment costs by employing this method.
Moreover, Hangzhou Dunyuan Juxin Semiconductor Technology Co., Ltd. (hereinafter “FTHS”), our core subsidiary for siliconparts manufacturing, will invest in the establishment of FTHSM through FTHSJ. We expect this investment will result in FTHSJ’scapital exceeding 10% of our capital. Therefore, we announce that it will convert into a specified subsidiary.
2. Increase of capital of our subsidiaries
FTHSJ

New company (FTHSM)(1)Current capital

100 million yen-(2)Capital increase to be2,888.55 million yen

130.35 million yuan

implemented this time(3)

(approx. 2.9 billion yen)Registered capital

2,988.55 million yen

after capital increase

130.35 million yuan
(approx. 2.9 billion yen)

*Exchange rate: 1 Chinese yuan = 22.16 yen

3. Overview of the capital investment (new factory)(1)

Investment amount

130.35 million yuan (approx. 2.9 billion yen) *1 Chinese yuan = 22.16 yen
Factory modification cost: 39 million yuan (approx. 900 million yen)
Machinery, equipment, etc.: 91.35 million yuan (approx.2 billion yen)(2)Location of the new factory(3)

Total floor area of theJohor Bahru, Johor, southern Malaysia
Approx. 6,000 m2

building(4)

Schedule

Start of the equipment ordering: October 2024
Start of the interior work: December 2024
Completion of the equipment installation: May 2025

News Release: Ferrotec Holdings Corporation(5)

Scheduled date of start of(6890 TSE Standard)August 2025

operation

4. Outline of our subsidiaries
1) New company (FTHSM)
(1)

Name

Ferrotec Silicon (Malaysia) Sdn. Bhd. (FTHSM)(2)

Address

Johor Bahru, Johor, southern Malaysia(3)

Title and name ofSu Jin Fa, Legal Representative

Representative(4)

Contents of business(5)

Capital(6)Date of establishment

July 2024 (planned)

Major shareholder andFerrotec Silicon Japan Corporation (FTHSJ): 100%

(7)

(8)

R&D, production and sale of silicon parts for semiconductors, etc.
130.35 million yuan (approx. 2.9 billion yen) *1 Chinese yuan = 22.16 yenshareholding ratio
CapitalFTHSM is a subsidiary whose voting rights are completely

relationshipheld by FTHSJ, a consolidated subsidiary of the Company.

Relationship between

Personnel

The representative director and president of the Company

FTHSM and the company

relationshipwill concurrently serve as director of the subsidiary.

Business

Nothing is applicable.

relationship
2) FTHSJ as of June 30, 2024 (converted into a specified subsidiary)
(1)

Name

Ferrotec Silicon Japan Corporation (FTHSJ)(2)

Address

2-3-4 Nihonbashi, Chuo City, Tokyo(3)

Title and name ofToshihiro Ishizuki, Representative Director and President

Representative(4)

Contents of business

Sale of silicon parts, silicon materials and quartz crucibles for semiconductors,etc.

(5)

Capital(6)Date of establishment

December 6, 2022

Major shareholder andHangzhou Dunyuan Juxin Semiconductor Technology Co., Ltd. (FTHS): 100%(7)

100 million yen

shareholding ratio
Capital relationshipFTHSJ is a subsidiary whose voting rights arecompletely held by FTHS, a consolidated subsidiary(8)of the Company.

Relationship between
FTHSJ and FTHS

Personnel relationshipThe director of the Company concurrently serves as
director of the subsidiary.

Business relationship(9)Nothing is applicable.

Financial position and operating results in the past two years (unit: million yen)
Fiscal year

FY12/2022

FY12/2023

Net assets

178

158

Total assets

178

181

Net asset per share (yen)0.990.88

Net sales

0100

Net income-1-19

Dividend per share--News Release: Ferrotec Holdings Corporation(6890 TSE Standard)

3) FTHS as of June 30, 2024
(1)

Name

Hangzhou Dunyuan Juxin Semiconductor Technology Co., Ltd. (FTHS)(2)

AddressBldg. C, No. 668 Binkang Rd., Binjiang, Hangzhou, Zhejiang, People’s
Republic of China(3)

Title and name ofHe Xian Han, Representative Director

Representative(4)

Contents of business(5)

Capital(6)Date of establishment

December 18, 2018

Major shareholder andNingxia Dunyuan Juxin Semiconductor Technology Corporation (FTNC):(7)

shareholding ratio

R&D, production and sale of silicon parts for semiconductors, etc.
300 million yuan (approx. 6.6 billion yen) *1 Chinese yuan = 22.16 yen

100%
Capital(8)

FTHS is a subsidiary whose voting rights are completely held

relationshipby FTNC, a consolidated subsidiary of the Company.

Relationship between FTHS

Personnel

The representative director and president of the Companyand FTNC

relationshipconcurrently serves as director of the subsidiary.

Business

Nothing is applicable.

relationship

5. Future outlook
The impact on the business performance of the Company for the current fiscal year through this matter is expected to beminor. However, we will promptly disclose relevant items as soon as they are confirmed.